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New home market tight

Homes are under construction in The Preserve at Anchors Bend off of Middle Sound Loop Road in Wilmington. The home construction market in New Hanover county is tight and while some subdivisions are being developed, others are being made over.

Published: Wednesday, August 14, 2013 at 11:36 a.m.

Last Modified: Wednesday, August 14, 2013 at 11:36 a.m.

New Hanover County's market for new construction homes is so tight that in some price ranges there is virtually no supply, area real estate experts say.

In many instances, homes are bought before they are built or just as soon as they are finished, they say. And the supply of so-called buildable lots – those with infrastructure and utilities installed – has shrunk to the point that some developers are being attracted back to the market, said Donna Girardot, executive officer of the Wilmington Cape Fear Home Builders Association.

But a new supply of lots may be up to a year away, she said, as developers must first jump regulatory hurdles on a compressed timetable.

Out of foreclosure

Many of the homes being built now are going up on finished lots in subdivisions bought out of foreclosure.

For instance, sales are strong at Anchors Bend off Middle Sound Loop Road, said Lisa Sanders, an agent for Raleigh-based Fonville, Morisey, and Barefoot, which is marketing the property. Homes in two sections are priced from $322,900 to $421,000, but that's much lower than they were planned before the former owner went bankrupt, Sanders said.

Another is Live Oak Village in Kure Beach, priced from $500,000 to $750,000. "Everything in there is sold or under contract," said Justin Donaton, owner of Coastwalk Real Estate in Carolina Beach.

But most homes in reborn subdivisions sell from about $150,000 to the low $200,000s, agents said. That's because builders bought the lots from banks at heavy discounts and were able to construct homes in the more affordable price ranges in most demand today.

Short on inventory

But those lots are almost gone now, said Ashley Garner, a broker with Intracoastal Realty.

"Yes, there is a shortage of new-home inventory without a shadow of doubt," said Tim Milam, president of Coldwell Banker Sea Coast Advantage Realty. "As a result, not enough houses are being built to meet demand."

That shows up in the home sale numbers.

"On average, we had 5.6 months of inventory (of homes) at the end of the second quarter," Garner said. That means that it would take that long to sell all the new-construction homes on the market at the current rate. "That's a sellers market, and that includes the higher price ranges."

In some lower price ranges, there's not even a month's worth of homes left to sell, Garner said.

There is only a 1.7-month supply of homes priced from $220,000 to $240,000 and a little more than three weeks' supply of those costing $120,000 to $140,000, Garner said.

The short supply of land and the high demand for homes has some developers looking at small, infill pieces of land.

Lantana Crossing just opened off Market Street and Judges Road. The subdivision comprises about 80 lots and homes start just under $200,000, said Milam, whose firm is marketing the project.

To the south, Nathan Sanders of Sanco Homes is ready to break ground on a 12-home subdivision off Harper Road in Carolina Beach called The Porches, priced from $275,000 to $300,000.

Land's the problem

"The only thing that's limited building is to have the land to build on," Girardot said. "Most of the (developed) properties are pretty well bought up."

"We're running out of dirt," said Buddy Blake of Re/Max Essential. "What's left has a lot of wetlands. It's tough. There's a reason the land is left over – it wasn't easy to develop."

Though it's tough, that isn't putting off the developers who were smart or lucky enough to have survived the housing depression.

That development, however, is going to take time, Girardot said, because developers face governmental and environmental regulations that have to be met on a tight schedule. Banks want a turnaround in the sale of their land of only about 90 days, she said.

Indeed, many of the permits to develop the land – stormwater, wastewater and CAMA, for example – have expired, Girardot said. A state law that extended the permits expired in 2011, she pointed out.

But a bill passed by the General Assembly this year will help some developers because it allows permits that were granted before the housing bust to be transferred when the land changes hands, Girardot said.

That eliminates the lengthy process of getting new permits, and those are the lots – most in existing subdivisions – that will come on the market soonest.

<p>New Hanover County's market for new construction homes is so tight that in some price ranges there is virtually no supply, area real estate experts say.</p><p>In many instances, homes are bought before they are built or just as soon as they are finished, they say. And the supply of so-called buildable lots – those with infrastructure and utilities installed – has shrunk to the point that some developers are being attracted back to the market, said Donna Girardot, executive officer of the Wilmington Cape Fear Home Builders Association.</p><p>But a new supply of lots may be up to a year away, she said, as developers must first jump regulatory hurdles on a compressed timetable.</p><h3>Out of foreclosure</h3>
<p>Many of the homes being built now are going up on finished lots in subdivisions bought out of foreclosure. </p><p>For instance, sales are strong at Anchors Bend off Middle Sound Loop Road, said Lisa Sanders, an agent for Raleigh-based Fonville, Morisey, and Barefoot, which is marketing the property. Homes in two sections are priced from $322,900 to $421,000, but that's much lower than they were planned before the former owner went bankrupt, Sanders said.</p><p>Another is Live Oak Village in Kure Beach, priced from $500,000 to $750,000. "Everything in there is sold or under contract," said Justin Donaton, owner of Coastwalk Real Estate in Carolina Beach.</p><p>But most homes in reborn subdivisions sell from about $150,000 to the low $200,000s, agents said. That's because builders bought the lots from banks at heavy discounts and were able to construct homes in the more affordable price ranges in most demand today.</p><h3>Short on inventory</h3>
<p>But those lots are almost gone now, said Ashley Garner, a broker with Intracoastal Realty. </p><p>"Yes, there is a shortage of new-home inventory without a shadow of doubt," said Tim Milam, president of Coldwell Banker Sea Coast Advantage Realty. "As a result, not enough houses are being built to meet demand."</p><p>That shows up in the home sale numbers.</p><p>"On average, we had 5.6 months of inventory (of homes) at the end of the second quarter," Garner said. That means that it would take that long to sell all the new-construction homes on the market at the current rate. "That's a sellers market, and that includes the higher price ranges." </p><p>In some lower price ranges, there's not even a month's worth of homes left to sell, Garner said.</p><p>There is only a 1.7-month supply of homes priced from $220,000 to $240,000 and a little more than three weeks' supply of those costing $120,000 to $140,000, Garner said.</p><p>The short supply of land and the high demand for homes has some developers looking at small, infill pieces of land.</p><p>Lantana Crossing just opened off Market Street and Judges Road. The subdivision comprises about 80 lots and homes start just under $200,000, said Milam, whose firm is marketing the project.</p><p>To the south, Nathan Sanders of Sanco Homes is ready to break ground on a 12-home subdivision off Harper Road in Carolina Beach called The Porches, priced from $275,000 to $300,000.</p><h3>Land's the problem</h3>
<p>"The only thing that's limited building is to have the land to build on," Girardot said. "Most of the (developed) properties are pretty well bought up."</p><p>"We're running out of dirt," said Buddy Blake of Re/Max Essential. "What's left has a lot of wetlands. It's tough. There's a reason the land is left over – it wasn't easy to develop."</p><p>Though it's tough, that isn't putting off the developers who were smart or lucky enough to have survived the housing depression. </p><p>That development, however, is going to take time, Girardot said, because developers face governmental and environmental regulations that have to be met on a tight schedule. Banks want a turnaround in the sale of their land of only about 90 days, she said.</p><p>Indeed, many of the permits to develop the land – stormwater, wastewater and CAMA, for example – have expired, Girardot said. A state law that extended the permits expired in 2011, she pointed out.</p><p>But a bill passed by the General Assembly this year will help some developers because it allows permits that were granted before the housing bust to be transferred when the land changes hands, Girardot said. </p><p>That eliminates the lengthy process of getting new permits, and those are the lots – most in existing subdivisions – that will come on the market soonest.</p><p><a href="http://www.starnewsonline.com/section/topic99"><b>Wayne Faulkner</b></a>: 343-2329</p><p>On <a href="http://www.starnewsonline.com/section/news41"><b>Twitter</b></a>: @bizniznews</p>